Issue Date: February 4, 2008
Campaign Donations Take Bipartisan Shift
U.S. CHEMICAL MANUFACTURERS haven't exactly abandoned the Republican Party. But like many other donors in the business community, the industry is giving a much larger share of its political campaign contributions to Democratic candidates as the 2008 national elections approach.
Since 1990, companies that make chemicals and related products such as plastics, paints, and explosives have given three-quarters of their total donations to Republican candidates for federal office, according to the Center for Responsive Politics. CRP is a nonpartisan group that analyzes campaign finance records filed with the Federal Election Commission (FEC). So far in the two-year 2008 election cycle, however, the chemical manufacturing sector has delivered 62% of its campaign cash to Republicans, a considerable drop—off from 75% in the 2006 midterm elections and 77% in 2004, the last presidential election year.
The driving force behind the change is the Democratic takeover of Congress after 12 years of Republican rule. Businesses are now trying to build relationships with the new power brokers. Most executives say they give political donations to candidates who support their businesses, regardless of party affiliation.
Even though "you see these pretty dramatic shifts in terms of where the money is going, our criteria really don't change," says Jack N. Gerard, president and chief executive officer of the American Chemistry Council (ACC), the chemical industry's main lobbying organization. "We strive to set out criteria and then focus on and support those candidates who share our views. We support people who support us in our public policy agenda. We don't care if they are Republicans or Democrats. We're looking for people who support the business of chemistry."
Most corporate campaign donations come from political action committees, or PACs, which raise pools of money from senior company employees. Donations by most PACs are capped at $5,000 per candidate per election, but company executives independently can give as much as $2,300 per candidate in each election. Federal law bans unlimited donations to politicians.
ACC, which represents 134 major U.S. chemical companies, has distributed more than $140,000 to congressional candidates in the current cycle through its AmeriChem PAC; 57% of the money went to Republicans, according to CRP. In each of the past two elections, the trade group gave about 80% of its campaign dollars to Republicans.
THE INCREASE in donations to Democrats has been even more pronounced at some of the nation's biggest chemical companies. Dow Chemical, for example, gave Republican candidates 83% of its political contributions in 2006 and 71% in 2004. But the latest figures show that disbursements for 2008 have been almost evenly divided, with Democrats receiving 48%.
Peter A. Molinaro, Dow's vice president of federal and state government affairs, says the shift reflects an effort by the company to be more even-handed in doling out campaign money. "The feeling was that maybe we needed to look for more balance, because it has typically been our approach to seek bipartisan solutions to the issues we work on," he remarks.
DuPont, Huntsman Corp., and Air Products & Chemicals are among the companies that are now donating more cash to Democrats than to Republicans. Their contributions to Democratic candidates have each jumped from less than 35% in 2006 to 60% or more during the first half of the 2008 campaign, according to CRP's analysis, which is based on figures released by FEC on Oct. 29, 2007.
"Part of our role is to engage in the public policy development process to advance the strategic objectives of our company," says R. Clifton Webb, vice president of government affairs for DuPont. "We have to have good relationships with the enablers who can allow that to happen. Our patterns in giving are focused on achieving good, sound policies that support our company and our industry and are consistent with the kinds of things that it takes for an enterprise like DuPont to be successful."
Gerard notes that the number of member companies contributing to ACC's PAC has increased since he took over in 2005, and records for receipts have been set in each of the past two years. "The companies understand the importance of supporting candidates who share our view of the world," he says. "But the challenge we have is that we don't have enough resources to give to all of our friends."
Rather than always contributing money to the reelection campaigns of industry supporters who occupy "safe" congressional seats, Gerard says ACC is making "a concerted effort to identify new friends, people who for years may have been with us in the trenches but whom we haven't given as much money to as we would have liked, merely because we haven't had enough resources. So the hope is to grow the numbers bigger and raise enough money so that we can give to all of our friends."
Although Republicans are often viewed as being more sympathetic to the concerns of the business community, Gerard says there are "a lot of good Democrats on Capitol Hill who spend a lot of time on and work hard for the interests of our industry. At the end of the day, this is all about jobs."
ONE EXAMPLE he cites is Sen. Mary L. Landrieu (D-La.), a key member of the Senate Energy & Natural Resources Committee. In a bid to boost domestic energy supplies, Landrieu cosponsored and helped pass legislation in 2006 to open more of the Gulf of Mexico to offshore oil and gas exploration. "She's done great work for us on natural gas," Gerard says. "If the chemical industry is going to be able to remain in places like Louisiana," Molinaro adds, "it's going to need members of Congress like Sen. Landrieu who understand the connection between competitively priced energy and the ability to retain jobs in the U.S."
Another example Gerard cites is one of the most liberal members of the House, Rep. Neil A. Abercrombie (D-Hawaii), who introduced legislation in June 2007 that would lift the federal moratoriums on offshore drilling for natural gas—a key goal for chemical manufacturers that have been reeling from high gas prices. "Who would have ever thought that Congressman Abercrombie would be a big advocate for the business of chemistry? But he is," Gerard says.
In determining which candidates to support, industry officials say they weigh a variety of factors. "There's a tendency in a science-based company to sometimes try to be overly scientific about it. There's no single equation," Molinaro says. Generally, he notes, Dow closely examines the voting records of members of Congress who represent districts in which the company's facilities and employees are located.
"Their attitude on general business issues is very important. And whether they chair a committee or are a senior or ranking (minority) member of a committee that's of relevance to the issues we deal with, that's also very important," Molinaro explains. "Whether they champion a cause or an issue that is consistent with our views is a factor irrespective of which committee they're on or whether we have a facility in their district. We try to look beyond our own narrow boundaries," he remarks.
Midland, Mich.-based Dow has contributed money in the past year to the state's senior senator, Democrat Carl Levin, who is up for reelection this fall. Molinaro points out that Dow is one of the largest companies in the state and is a significant contributor to the local economy. "It's important for us to have dialogue and relationships with key members of Michigan's congressional delegation. Sen. Levin doesn't always vote our way, but he's been very supportive on a number of key issues. He wants to see the state thrive, and so do we," he says.
The results of the 2006 elections not only radically altered the makeup of the House and Senate, they also put Democrats in charge of all the congressional committees and subcommittees, where members hold hearings and draft, debate, and revise legislation. During these meetings, the real action takes place. Consequently, chairmen who preside over panels with jurisdiction over industry-wide or company-specific issues get special attention from lobbyists.
"If you have a limited resource, then you have to go where your top priorities are," Gerard says. Rep. Bennie G. Thompson (D-Miss.) is an example of "someone who has risen to a position of leadership where he becomes a higher priority," Gerard notes. Thompson, who received $5,000 in contributions from the AmeriChem PAC last year after he became chairman of the House Homeland Security Committee, will play a central role in shaping legislation to safeguard the nation's chemical facilities.
"I think he is someone we can work with quite effectively," Gerard says. "Chairman Thompson didn't know a great deal about the business of chemistry. Part of getting to know him is to understand his philosophy. I think he's more understanding than probably most people thought he would be as to what's in the best interests of the economy and the country."
Another once-unlikely recipient of chemical industry cash is liberal firebrand Rep. Charles B. Rangel (D-N.Y.), who now heads the tax-writing House Ways & Means Committee. "So much happens at Ways & Means that's of significance to all manufacturers," says Molinaro. "There's tax and trade policy; there's health care. So our criteria would naturally move toward those members who have responsibility for the major issues we deal with."
AN IMMEDIATE GOAL, Molinaro says, is convincing the committee to quickly renew a tax break that rewards companies for conducting basic research and development work in the U.S. The credit, which lapsed at the end of 2007, has been extended a dozen times by Congress since its creation in 1981. Foreign competitors "are providing tremendous incentives for companies to move their R&D centers outside the U.S.," Molinaro says.
Webb says the shift in DuPont's political contributions also reflects the fact that almost one-third of his company's revenues now come from agricultural products. The Delaware-based company has donated money in the current campaign cycle to Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) and ranking member Sen. Saxby Chambliss (R-Ga.), who have been shepherding new farm policy legislation through Congress.
House Transportation & Infrastructure Committee Chairman James L. Oberstar of Minnesota is another Democrat who has received funding from the chemical industry in the past year. Oberstar is now in a position to advance legislation he is cosponsoring that is designed to improve freight railroad service and lower rates for shippers of chemicals and other bulk commodities.
"The transportation debate, especially on rail, is extremely important to us," Webb says. "So when you look at how we manage our PAC, you will see that we support members whose objectives, goals, and voting records are aligned with where we're taking the company."
Gerard says it's unfortunate that some people believe there is something unsavory about political fund-raising. "Political giving is about helping elect individuals who share your vision for the country, and who share your vision on certain public policy issues. It's not about buying votes," he asserts. "It's part of the process. It's an expression of who individuals, PACs, and others believe will take the right positions when confronted with issues important to the business of chemistry."
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